Your student loan provider gives you six months after graduation before you have to start paying on your student loans. Think of it as a graduation present, even though it’s a really lousy one. You have time to get yourself together before you have to start paying your debt, so use this time to get a job. Even if it’s not in your field of choice, find something! Make a budget and then pay yourself your student loan payment. When your grace period is up, you will have a huge payment stashed away in savings to apply to your loans. Plus, you’ve just trained yourself to come up with the money for your monthly payment.
2) Consolidate your loans.
If you have loans with multiple companies, use the National Student Loan Data System to view all the student loans you have borrowed. This database pulls all student loan information in your name and provides you with the carrier and how much you’ve borrowed. If having multiple student loans carriers bug you, consider consolidating into a Direct Consolidation Loan.
3) Auto pay your loan.
Interest is not your friend. This is the part about student loans that’s going to cause you the most headache. It seems every time you send in a payment, very little goes toward the actual amount you borrowed and the majority goes towards interest! So here’s the thing, if you sign up for automatic payment through your student loan carrier, many of them offer interest rate deductions. You betta save that money! Sign up for the auto pay and keep a nice little buffer in your checking account so you don’t have to worry about the money being available when it’s time for your payment to be withdrawn.
4) Refinance Your Loan
Again, it’s worth repeating — interest is not your friend. However, using auto-pay to reduce your interest rate is not your only option. If you can afford the standard repayment plan (usually 10 years), you can probably afford to refinance your student loans and get a lower interest rate. Here’s one thing to consider — if you refinance, you lose those little perks the government offers like economic hardship deferment. Make sure you explore your options and choose what’s best for you.
5) Start a Side hustle.
Now this one is big! Consider this — make a $500 student loan payment for 10 years under the standard repayment plan, or pay $1,000 a month and cut your repayment period in half? Not only does the second one sound appealing because you’d be getting out of debt quicker, you would be saving money too! That’s years shaved off the life of your loan and less interest paid. So, how can you pay twice your minimum payment a month? Pick up a part-time job, work overtime, or utilize my favorite money making method — side hustling. It’s what I’m doing and I can vouch that it’s working!
6) Loan Forgiveness
There are two ways you can go about this forgiveness thing — volunteer or choose a career path that allows student loan forgiveness. If you work in public service roles such as teaching, nursing, or certain legal fields, you may qualify for student loan forgiveness.
7) Avoid new debt like your life depends on it.
Bruce Mesnekoff says, “no new friends.” Well, I’m telling you, no new debt! As long as you’re in debt you are missing out on the power of compound interest. With compound interest, instead of paying interest on a loan, you invest your money and reap the rewards of your money working for you. This is much better than paying to borrow others money.
Best of Luck Students!!
Contact Bruce mesnekoff for any further assistance
Student Loan Help Center General Manager Bruce Mesnekoff joins us to Discuss the Student Loan Situation in America
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